Dan D’Ambrosio

Free Press Staff Writer

The Burlington Town Center mall is seen at a reopening ceremony in September 2006 following renovations. / FREE PRESS FILE

A handout distributed at a Public Investment Team meeting Thursday night depicts a development concept for Burlington Town Center on Cherry Street. 'These are conceptual drawings only, just to show mass,' Burlington Town Center General Manager Mathew Chabot said. / APRIL BURBANK\FREE PRESS

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There are two principals involved in the purchase of Burlington Town Center mall, one of whom grew up in Burlington, the mall’s general manager says.

That’s as far as Town Center General Manager Mathew Chabot was willing to go Friday in discussing the sale and redevelopment of the downtown mall, announced by Chabot during a city meeting Thursday night. The sale is under contract to close Dec. 16. Chabot did not reveal the purchase price.

Let the guessing begin.

Mayor Miro Weinberger said he has met with the prospective new owners of the mall, and he’s impressed with their plans. Weinberger declined to identify the prospective owners.

“The plans, as far as I know, are fairly preliminary,” Weinberger said. “I will say if this all unfolds as I believe the new buyers are planning, it’s exciting for the city. It will be a transformational change for Cherry Street, something that has been a goal of the city for some time.”

Weinberger said the transformation would come in the form of new restaurants and retail space on the Cherry Street side of the mall, connecting it to the street in a way it is not connected now, and making it more attractive to walk to the waterfront from Church Street — a development priority for the city.

“This has the potential to dramatically change that walking experience between Church Street and Battery Street,” Weinberger said. “A large stretch of that street has very little reason for someone to want to walk down the street.”

The city is considering its own improvements to Cherry Street as one of nine ideas that have been put forward to revamp the waterfront. The $2.9 million proposal for Cherry Street would include landscaping and trees, improved stormwater capacity and other changes.

Weinberger acknowledged the nine proposals to improve the waterfront have a total cost of about $17 million, and there is only about $5 million of tax increment financing available to pay for the projects. The mayor and City Council have to decide by January which projects to put before the public for a vote in March.

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“We have to put a slate forward that fits within this capacity,” Weinberger said. “We haven’t done that work yet. I genuinely do not know what we’re going to come forward with.”

Mathew Chabot made the announcement of the mall’s sale at a Public Investment Team meeting in City Hall on Thursday night in connection with the Department of Public Works proposal for developing Cherry Street, which anticipates some redevelopment of the mall.

“It’s going to get the property in lock step with the growth that’s taking place in Burlington,” Chabot said in an interview. “There’s a lot of great things taking place right now, and we want to be part of that.”

Chabot confirmed Friday the current owner of the mall, Chicago-based General Growth Properties, put out a request for proposals to buy the mall in August 2012. Chabot said GGP then took the mall off the market in January 2013 before entering into the deal that resulted in its sale.

“The current prospective owner did maintain interest throughout,” Chabot said of the period beginning in 2012.

The mall opened in 1976 as the Burlington Square Mall and cost $8 million to $10 million to build. The two-level enclosed center has undergone several transformations and ownership changes since.

In 1999, the mall received a $26 million renovation for anchor Filene’s (now Macy’s), ending years of speculation about whether the department store would come to downtown Burlington. As Filene’s moved in, the dark and outdated mall received a major renovation that also had been delayed. The $50 million project was accomplished in 2001, and along with it came several major national retail chains such as Williams Sonoma and Pottery Barn.

General Growth Properties purchased a 50 percent stake in the mall in 2004 and became its full owner in January 2007.

Burlington Business Association Executive Director Kelly Devine said Friday the sale of the mall is connected to GGP’s emergence from bankruptcy in November 2010. The $30 billion company, the second largest owner of malls in the country, declared Chapter 11 bankruptcy in April 2009, following the financial meltdown that froze the nation’s credit systems.

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“I think there’s an advantage to local ownership, to having a committed owner in a good financial position with an eye toward moving forward,” Devine said.

Scott Crowe, portfolio manager for Resource Real Estate in New York City, said the main reason General Growth Properties went into bankruptcy was that it had too much debt coming into the “big downturn” in 2008. Crowe said the company has emerged from bankruptcy in good shape, with new management that has been selling GGP’s “legacy assets,” such as the Burlington mall.

“Most of GGP’s problem was that they had some doggy properties,” Crowe said. “They’ve been culling those for some time. I think Burlington is what they call a lower-productivity mall. The sales growth of that mall is unimpressive. Part of their strategy is to sell low-productivity malls.”

As of September, General Growth Properties owned 123 regional malls covering about 127 million square feet of retail space. Burlington Town Center mall has about 317,000 square feet of retail space, a fraction of General Growth Properties’ overall holdings but a substantial portion of the retail space in downtown Burlington, which totals just under 1 million square feet.

“The mall represents a significant percentage of our retail space downtown,” Devine said. “Look at the anchor stores in there. We have some strong outlets in that mall.”

Weinberger said the national chain stores in the mall generally are credited with playing a role in the success of Church Street, drawing a wider range of shoppers to the street.

“Church Street is a small miracle,” Weinberger said. “We are one of the few cities in the country that has this kind of dynamic downtown. The mall has been a part of that success, and I want to see that success continue.”